Barclays Americas Select Conference 2018 - John F. Woods Chief Financial Officer May 15, 2018 - Investor Relations
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Barclays Americas Select Conference 2018 John F. Woods Chief Financial Officer May 15, 2018
Forward-looking statements and use of key performance metrics and non-GAAP financial measures
This document contains forward-looking statements within the Private Securities Litigation Reform Act of 1995. Statements regarding potential future share repurchases and future dividends are forward-looking statements.
Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,”
“goals,” “targets,” “initiatives,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.”
Forward-looking statements are based upon the current beliefs and expectations of management, and on information currently available to management. Our statements speak as of the date hereof, and we do not assume
any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. We caution you, therefore, against
relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or
risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation:
Negative economic and political conditions that adversely affect the general economy, housing prices, the job market, consumer confidence and spending habits which may affect, among other things, the level of
nonperforming assets, charge-offs and provision expense;
The rate of growth in the economy and employment levels, as well as general business and economic conditions, and changes in the competitive environment;
Our ability to implement our business strategy, including the cost savings and efficiency components, and achieve our financial performance goals;
Our ability to meet heightened supervisory requirements and expectations;
Liabilities and business restrictions resulting from litigation and regulatory investigations;
Our capital and liquidity requirements (including under regulatory capital standards, such as the U.S. Basel III capital rules) and our ability to generate capital internally or raise capital on favorable terms;
The effect of changes in interest rates on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale;
Changes in interest rates and market liquidity, as well as the magnitude of such changes, which may reduce interest margins, impact funding sources and affect the ability to originate and distribute financial
products in the primary and secondary markets;
The effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin;
Financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and
regulation relating to bank products and services;
A failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors or other service providers, including as a result of cyber-attacks; and
Management’s ability to identify and manage these and other risks.
In addition to the above factors, we also caution that the amount and timing of any future common stock dividends or share repurchases will depend on our financial condition, earnings, cash needs, regulatory constraints,
capital requirements (including requirements of our subsidiaries), and any other factors that our Board of Directors deems relevant in making such a determination. Therefore, there can be no assurance that we will
repurchase shares or pay any dividends to holders of our common stock, or as to the amount of any such repurchases or dividends.
More information about factors that could cause actual results to differ materially from those described in the forward-looking statements can be found under “Risk Factors” in our Annual Report on Form 10-K for the year
ended December 31, 2017, filed with the United States Securities and Exchange Commission on February 22, 2018.
Key Performance Metrics and Non-GAAP Financial Measures and Reconciliations
Key Performance Metrics:
Our management team uses key performance metrics (KPMs) to gauge our performance and progress over time in achieving our strategic and operational goals and also in comparing our performance against our peers. We
have established the following financial targets, in addition to others, as KPMs, which are utilized by our management in measuring our progress against financial goals and as a tool in helping assess performance for
compensation purposes. These KPMs can largely be found in our periodic reports which are filed with the Securities and Exchange Commission, and are supplemented from time to time with additional information in
connection with our quarterly earnings releases.
Our key performance metrics include:
Return on average tangible common equity (ROTCE);
Return on average total tangible assets (ROTA);
Efficiency ratio;
Operating leverage; and
Common equity tier 1 capital ratio.
In establishing goals for these KPMs, we determined that they would be measured on a management-reporting basis, or an operating basis, which we refer to externally as “Adjusted” or “Underlying” results. We believe that
these “Adjusted” or “Underlying” results provide the best representation of our financial progress toward these goals as they exclude items that our management does not consider indicative of our ongoing financial
performance. KPMs that contain “Adjusted” or “Underlying” results are considered non-GAAP financial measures.
Non-GAAP Financial Measures:
This document contains non-GAAP financial measures. The appendix presents reconciliations of our non-GAAP measures. These reconciliations exclude “Adjusted” or “Underlying” items, which are included, where
applicable, in the financial results presented in accordance with GAAP. “Adjusted” or “Underlying” results, which are non-GAAP measures, exclude certain items, as applicable, that may occur in a reporting period which
management does not consider indicative of on-going financial performance.
The non-GAAP measures presented in the appendix include reconciliations to the most directly comparable GAAP measures and are: “noninterest income”, “total revenue”, “noninterest expense”, “pre-provision
profit”, “total credit-related costs”, “income before income tax expense”, “income tax expense”, “effective income tax rate”, “net income”, “net income available to common stockholders”, “other income”, “salaries and
employee benefits”, “outside services”, “amortization of software expense”, “other operating expense”, “net income per average common share”, “return on average common equity” and “return on average total assets”.
We believe these non-GAAP measures provide useful information to investors because these are among the measures used by our management team to evaluate our operating performance and make day-to-day operating
decisions. In addition, we believe our “Adjusted” or “Underlying” results in any period reflect our operational performance in that period and, accordingly, it is useful to consider our GAAP results and our “Adjusted” or
“Underlying” results together. We believe this presentation also increases comparability of period-to-period results.
Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable
to similar measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measure. Non-GAAP
financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for our results as reported under GAAP.
2
Solid franchise with leading positions in attractive markets
Franchise highlights
Top 5 deposit market share in 9 of
our 10 largest MSAs(1)
#2 deposit market share in
New England(2)
Top 5 rank HELOC in 9/9 markets(3)
CFG corporate headquarters
Top 4 rank in Education(4)
Providence, RI
CFG branch location
CFG non-branch location
Ranked #7 Overall Middle Market
lead/joint lead bookrunner(5)
$ Billions
Assets Deposits Loans Consumer customer experience
ranked #1 among banks(6)
$153.5 $115.7 $111.4
Rank #13 Rank #11 Rank #12 Top 2 Box Score and overall
commercial customer satisfaction
rating of 94%(7)
Note: Period-end balances as of March 31, 2018, loan balances exclude loans held for sale. Ranking based on 4Q17 data, unless otherwise noted; excludes non-retail depository institutions, includes U.S. subsidiaries of foreign banks.
1) Source: FDIC, June 2017. Excludes “non-retail banks” as defined by SNL Financial. The scope of “non-retail banks” is subject to the discretion of SNL Financial, but typically includes: industrial bank and non-depository trust charters, institutions with more than 20% brokered deposits (of total deposits),
institutions with more than 20% credit card loans (of total loans), institutions deemed not to broadly participate in the banking services market and other non-retail competitor banks.
2) Source: FDIC June 2017 and SNL Financial. Top MSAs determined by retail branch count. Branches with ≥$500 million in deposits excluded. Excludes “non-retail banks” as defined by SNL Financial. The scope of “non-retail banks” is subject to the discretion of SNL Financial, but typically includes: industrial
bank and non-depository trust charters, institutions with more than 20% brokered deposits (of total deposits), institutions with more than 20% credit card loans (of total loans), institutions
3) According to Equifax; origination volume as of 4Q17.
4) CFG estimate, based on published company reports, where available; private student loan origination data as of 1Q18.
5) Thomson Reuters LPC, Loan syndication league table ranking for the prior twelve months as of 1Q18 based on number of deals for Overall U.S. Middle Market (defined as Borrower Revenues < $500 million and Deal Size < $500 million).
6) 2018 Temkin Experience Rating, U.S. March 2018.
7) Barlow Research 2017 Voice of the Customer Survey (Top 2 Box Score). 3
Business Overview
Consumer Loans and Leases Commercial
In Footprint $111.4 billion(2) National
Retail Deposit Services Coverage
Mobile/Online Banking Commercial & Industrial Banking
55%
Mortgage(1) 45% Commercial Real Estate
Home Equity Loans/Lines Corporate Verticals
Wealth Management ─ Healthcare
─ Technology
Business Banking Deposits
$115.7 billion(2) ─ Oil & Gas
PERL(1) ─ Franchise Finance
National Products
72%
Auto Core, Equipment & Asset Based Lending
Education Finance Capital Markets
28%
Unsecured Global Markets
M&A Advisory
Consumer Commercial
Treasury Payment Solutions
Note: Period-end balances as of March 31, 2018 excludes held for sale.
1) Includes select originations outside the traditional branch banking footprint.
2) Consumer/Commercial deposit and loan mix percentages exclude non-core loans and leases of $2.6 billion and deposits of $7.1 billion in Other. 4
Strong execution and consistent progress
Entering a new phase focused becoming a top-performing bank
ROTCE(1) Medium-term Efficiency ratio(1) Medium-term
(Return on average tangible common equity) target target
~13-15% mid-50%’s
68.5% 68.7%
67.6%
12.3% 11.7%
68.1% 63.9%
66.5%
7.7%
6.7% 6.7% 9.8% 63.8% 60.9% 60.4%
4.3% 7.6%
6.1% 6.4% 60.0%
3Q13 (2) 2014 2015 2016 2017 1Q18 3Q13 (2) 2014 2015 2016 2017 1Q18
CET1 (4)
Medium-term EPS (1)
(Common equity tier 1 ratio) target (Diluted EPS) $3.44
$3.25
13.9%
12.4% FY18
11.7% 11.2% 11.2% 11.2% ~10.0-10.25%
$1.97 consensus
$1.61 $2.58
$1.55
$1.04 $1.93
$1.42 $1.55 $0.78
3Q13 (2) 2014 2015 2016 2017 1Q18 3Q13 (2,3) 2014 2015 2016 2017 1Q18
annualized
Outlook remains positive to drive continued improvement for all stakeholders
Reported results Adjusted/Underlying results (1)
1) Please see important information on Key Performance Metrics and Non-GAAP Financial Measures at the end of this presentation for an explanation of our use of these metrics and non-GAAP financial measures and
their reconciliation to GAAP financial measures. Where there is a reference to “Adjusted”, “Underlying” or “Adjusted/Underlying” results in a paragraph, all measures that follow these references are on the same
basis, when applicable. CAGR is calculated from annualized 3Q13-2017.
2) Commencement of separation effort from RBS.
3) Earnings per share for 3Q13 is the annualized calculation of earnings per share of $0.26 multiplied by 4.
4) Common equity tier 1 ("CET1") capital under Basel III replaced tier 1 common capital under Basel I effective January 1, 2015. 5How we will stand out from the competition
Customer-centric focus reflecting:
Expertise and deep knowledge of customers
Strong
High-quality advice
Culture Team approach
Insights from data analytics
Selective in how and where we play
Operating & Seeking to self-fund investments through efficiency enhancements; mindset of
Financial continuous improvement
Discipline Utilizing new technologies to deliver more effective outcomes at lower costs
Good stewards of our capital
Consumer Commercial
Banking products Quality coverage bankers
Excellence in Wealth advice Capital and global markets
key areas Data analytics Treasury solutions
Personalized solutions Team-based approach
Business partnering
6Medium-term targets
Medium-term ROTCE outlook
Medium-term targets
~1.3% ~(0.8)% ROTCE ~13-15%
~0.6% ~(1.1)%
~1.5%
~2.5%
Efficiency ratio mid-50%’s
~14%
~10% CET1 ~10.0-10.25%
FY 17
(1) (2)
Revenue net Yield curve Efficiency Taxes Credit Capital net Medium-term
(3)
Dividend
Underlying of required impact Initiatives normalization FY target ~35-40%
payout ratio
investment
Operational assumptions
Loan growth target of ~nominal GDP +1% Expect to continue to pursue formal efficiency
initiatives to fund expanded strategic investments
Asset sensitivity moderates as rates normalize
CET1 ratio annual reduction of ~30-40 bps
Operating leverage target of ~3-5%
Initial benefit of tax reform declines modestly
with time
Note: Medium-term financial targets assume real GDP growth of ~2.5–3.0% annually with no recession, increase in fed funds rate with ~2.25 bps rate moves per annum (25 bps each move), and unemployment rate ~3.5-4.0%.
1) Please see important information on Key Performance Metrics and Non-GAAP Financial Measures at the beginning and end of this presentation for an explanation of our use of these metrics and non-GAAP financial measures and their
reconciliation to GAAP financial measures. Where there is a reference to “Adjusted”, “Underlying” or “Adjusted/Underlying” results in a paragraph, all measures that follow these references are on the same basis, when applicable.
2) Includes volume driven credit costs unrelated to credit normalization.
3) Capital net includes the impact of risk-weighted asset growth net of targeted capital actions: retained earnings growth of ~(3.0)% partially offset by common stock repurchases of ~1.5% and the impact of rising rates on other
comprehensive income of ~0.4%. 7Keys to delivering higher medium-term returns
Tapping Our
Potential Enterprise-wide initiatives to drive improvement in performance
(“TOP”) and — Rigorous efficiency program to allow self-funding of investments
Balance Sheet — Recycle capital into more accretive growth and relationship categories; grow
Optimization higher risk-adjusted return asset portfolios, optimize deposit
(“BSO”)
Consumer
Grow and deepen primary household relationships
Wealth – Leverage investments in FCs and sales, product and technology platforms
Drive growth Mortgage – Channel and product remix toward direct-to-consumer and conforming;
purchase MSRs to increase scale economies
in fee
businesses Commercial
Continue to broaden Capital Markets capabilities; leverage new Global Markets
platform and capabilities
Treasury – Replatform cash management; capture value from recent product
investments
Active capital Prudently grow balance sheet while driving strong returns of capital
management to shareholders
Capture
asset Leverage asset sensitivity to benefit as rates rise
sensitivity
8Opportunities to improve returns: TOP programs
Current TOP program targeting run-rate pre-tax benefit of
~$95-$110 million by end of 2018
Revenue initiatives Efficiency initiatives
(examples) (examples)
New channels: Digital as a sales engine, Organization simplification: Spans and
direct to consumer mortgage, call center layers, centralization/ centers of excellence,
‘service to solutions’ role clarity
Expanding into growth areas: Corporate Lean/Process improvement: Redesigning
partnerships, Commercial growth markets end-to-end processes and leveraging
Build-out fee income and broader automation
capabilities: M&A advisory, Commercial asset- Customer journeys (revenue + efficiency):
backed finance, MSR purchases Simplifying and streamlining external
customer-centric processes
9BSO: Rigorous program to improve returns while driving growth
1Q18 YoY NIM expansion of 20 bps reflects 7 bps contribution from BSO efforts
Assets Liabilities
Investment portfolio Deposits
Reinvest to support liquidity Optimize deposit loan mix with a focus
Cash collateral management on lower-cost categories
Loan portfolio
Reposition/optimize loan mix across categories Borrowings
─ Improve returns while maintaining relatively Normalize funding profile
stable stress losses
Reallocate capital within loan categories with a
focus on deepening relationships
─ Refine appetite for credit-only and out-of-
footprint relationships
Actions
Consumer Utilize data and analytics and expanded product
— Grow education & unsecured sets to mitigagte competitive pricing dynamics
— Strategic reduction of auto
Consumer
Commercial
— Improve effectiveness of promotional
— Prudently grow CRE depository activity
— Exit low-return relationships — Increase investments in digital channels
— Reposition Asset Finance Commercial
— Focus on operational deposits
— Further enhance product suite
10Deposit cost growth remains in line with overall deposit growth
Deposit growth vs. Deposit cost growth
(1Q18 vs. 3Q15)
Consumer
30 bps R²= 0.70 Continuing to invest in data analytics
CFG to drive personalized targeting across
USB
products
Deposit cost growth
KEY — Targeted branch, digital and
20 FITB
STI direct mail offerings
MTB — Extending duration
PNC
BBT — Extend into digital channel
10
RF Moving away from one-size fits all
pricing to attract more stable deposits
CMA
Commercial
0
-10 -5 0 5 10 15 20% Dedicated liquidity specialist team
Deposit growth focused on growing client deposits
Noninterest-bearing deposit growth Upgraded escrow platform and added
(1Q18 vs. 1Q17) specialized resources
3.4%
2.6%
Targeted 4Q18/1Q19 launch of
0.1%
upgraded cash management platform
-0.2%
-1.2% -1.3%
-2.9%
-3.5% -3.7%
-7.2%
BBT CFG STI RF PNC KEY CMA USB FITB MTB
Note: Represents total deposit costs and noninterest-bearing deposit growth based on period end data.
Source: SNL Financial, 10-Qs, 10-Ks, Earning Releases and Supplements. 11Citizens Access - a new direct-to-consumer digital channel
The Citizens Access platform
A nationwide direct-to-consumer platform for digitally-savvy
consumers who value the flexibility and convenience of an
online offering
─ Initially offering FDIC-insured online savings accounts and
certificates of deposit with attractive rates and no fees
─ Targeting consumers that are willing to forego services
typically offered by a traditional branch channel in
exchange for better rates and lower fees
─ Delivered with simplicity and security that meets
consumers’ rapidly changing preferences towards digital
channels
Launch targeted for early third quarter 2018
Expected to generate ~$2 billion in deposits by year-end 2018
For illustrative purposes only
12Citizens Access – A complement to Citizens’ digital strategy
Platform to acquire growing segment of nationwide customers actively seeking to
Gain access to do business with a digitally-led direct bank
new customers
Extends and diversifies Citizens’ deposit franchise using a lower-cost-to-serve
and expands digital platform with minimal risk of impacting existing deposit base
distribution
reach Complements Citizens’ highly accretive retail lending initiatives such as
education refinance, merchant finance and home equity
Provides opportunity to leverage our investments in data and analytics
capabilities that enhance our ability to understand and react to changing
Enhances consumer preferences
digital Facilitates opportunity to innovate
capabilities ─ Nimble, real-time bank platform
and leverage
Enables piloting of new digital-only customer journeys and capabilities
analytics
Creates synergies as best practices are developed in meeting customer
expectations between digital and branch channels
Improves
efficiencies, Allows for improved efficiencies towards optimizing deposit costs
further Contributes to funding diversification and balances activities/investment with
strengthens traditional brick and mortar channel
liquidity and Launch of Citizens Access was contemplated in previous Citizens statements
diversifies regarding 2018 financial outlook and deposit betas
funding
13Remain rate sensitive
Interest rate sensitivity trend Highlights
Net interest income positioned to
continue to benefit from rising rates
6.0% ─ Our asset sensitivity has
5.5% 5.4% 5.1% 5.0% remained relatively stable
at 5.0%
3.9% Given our current positioning, 25 bp
3.5% 3.2%
3.0% 3.1% increase in rates would generate
~$15 million of NII per quarter
1Q17 2Q17 3Q17 4Q17 1Q18 ─ ~75% of our sensitivity is to the
CFG Peer median
short-end of the curve;~25% to
the long-end of the curve
Estimated
(1) (2)
Fixed vs. floating loans Fixed Floating Deposit betas Cumulative beta through-the-cycle beta
Commercial 27% 73% Commercial 56% ~70-75%
Consumer 68 32 Consumer 8 ~35-40
Total CFG 48% 52% Total CFG 24% ~60%
Cumulative loan betas through 1Q18 ~60%(1)
Note: CFG Data and Peer data as of 1Q18. Peer banks include BBT, CMA, FITB, KEY, MTB, PNC, RF, STI and USB. Peer estimates based on the public disclosures as of the most recent
quarter available and utilizes a 200 basis point gradual increase above 12-month forward curve except PNC, which is based on a 100 basis point gradual increase and STI, which is
based on a 200 basis point shock. PNC and STI excluded from peer median. Deposit and Loan betas based on 1 month LIBOR.
1) Includes hedges.
2) Deposit betas calculated for the period of 3Q15-1Q18. 14Plans to adjust capital structure but remain above peers
Common equity tier 1 comparison(1) Highlights
Strong CET1 capital position relative to peers
CMA 11.7%
─ Expect annual normalization of ~40 bps given both
CFG 11.2% capital return and strong loan growth
─ Expect peers to move towards 8%–10% over time
RF 11.1%
CFG medium-term CET1 target ~10.0-10.25%
MTB 11.0% Peer publicly-stated CET1 targets(2)
BBT ~10.0% PNC ~8.0-9.0%
FITB 10.6% FITB ~9.5% RF ~9.5%
KEY ~9.0% - 9.5% STIFurther opportunities to improve returns: Growth in fee income businesses
Fee Income
Consumer Commercial
Wealth Capital & Global Markets
Investments in FCs and sales, technology Broaden capabilities in DCM, M&A, CRE
platforms and products with shift toward
managed money New FX options/currency swaps platform
and capabilities
SpeciFi™ robo-advisor product
Western Reserve Partners acquisition
Business Banking closed May 2017; added 30+ M&A
professionals(1)
Fundation FinTech partnership to
automate small business underwriting Treasury Solutions
Mortgage Replatforming cash management system
Remix toward direct-to-consumer and Investments in trade finance, merchant
conforming product services and commercial card
Further leverage servicing platform
Organic growth orientation, with potential for selective fee-based acquisitions
1) Includes employees affiliated with WRP Valuations. 16Building an ecosystem of FinTech partnerships to accelerate our path to market
Launched innovative solutions and new
Investing in additional capabilities that leverage
capabilities that offer flexibility and speed for
FinTech relationships
our customers
Selected examples Selected examples
New digital (mobile-first) platform
Consumer
Simple and fast account opening experience
Automated investing Digital lending
platform for Wealth capability for small Digitized home buying process
customers businesses
Digitized HELOC application process
Commercial
Liquidity management portal
Digital invoice and End-to-end workflow Accounts payable and payments automation
payment collection tool to improve speed of
solution for Commercial customer onboarding Digital trade finance capabilities
customers and collaboration
To launch in 2Q18 Early in 2019
17Delivering for our customers
Ranked #1 in Temkin Citizens Bank awarded Best Zelle®, our P2P payments
Customer Experience for Treasury and Cash system launched in
U.S. Banks(1) Management provider for December registered more
the Northeast, Mid-Atlantic than 100,000 Citizens
and Midwest regions customers through 1Q18
Citizens Bank
SpeciFiSM
First large regional bank to Top 2 Box Score and overall 37 point increase in J.D.
roll out a fully integrated commercial customer Power branch
digital investment advisor satisfaction rating of 94%(3) satisfaction score(2)
platform – SpeciFiSM
1) 2018 Temkin Experience Rating, U.S. March 2018.
2) J.D. Power 2017 U.S. Retail Rankings Satisfaction Study, April 2017. Top 5 reflects wait times and in-person best practices for J.D. Power-surveyed footprint.
3) Barlow Research 2017 Voice of the Customer Survey (Top 2 Box score). 18Citizens has delivered consistent EPS growth….
$1.35
$0.85 $0.88 $0.92
$0.78
$0.61 $0.63 $0.68
$0.56 $0.55
$0.41 $0.46
$0.71
$0.52 $0.57
consensus estimates(3)
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18E 3Q18E 4Q18E
CFG GAAP EPS CFG Adjusted/Underlying EPS(2)
…though valuation has fallen off
16.0 x
FY2018E/FY2016 2018 P/E
MTB
Adj EPS growth(2,3) Ratio(2,3)
2018E Price/Earnings ratio(3)
CMA
PNC CMA 129% 14.4 x
14.0 x
BBT RF CFG 81% 12.2 x
FITB
RF 63% 13.7 x
STI
USB Peer Avg. 57% 13.5 x
CFG
12.0 x KEY KEY 55% 11.8 x
FITB 54% 13.3 x
MTB 54% 15.0 x
STI 49% 13.1 x
10.0 x
PNC 48% 14.2 x
20% 30% 40% 50% 60% 70% 80% 90%130%
100%
BBT 40% 13.6 x
2018E/2016 EPS Adj growth rate(3) Peer Average USB 25% 12.5 x
1) Compound annual growth rate.
2) Please see important information on Key Performance Metrics and Non-GAAP Financial Measures at the beginning and end of this presentation for an explanation of our use of these
metrics and non-GAAP financial measures and their reconciliation to GAAP financial measures, as applicable.
3) Source: Bloomberg, as of 5/9/2018. 19Key messages
Solid franchise with leading positions in attractive markets
Achieved IPO-based objectives and elevated our targets
Citizens results highlight disciplined execution and continued momentum
Robust balance sheet position
─ Credit quality and key coverage metrics remain strong
─ Remain focused on growing more attractive risk-adjusted return portfolios and
controlling deposit costs
Continued strong execution against all strategic initiatives
─ Keen focus on continuous improvement
─ Focused on delivering enhanced customer experience
─ Continue to self-fund significant investments in technology, digital capabilities,
talent and growth initiatives
Focused on becoming a top performing bank
On track to deliver well for all stakeholders in 2018
20Appendix
21Our vision and credo guide us
Mission To help our customers, colleagues and communities reach their potential
To be a top-performing bank distinguished by its customer-centric culture, mindset
Vision of continuous improvement and excellent capabilities
We perform our best every day so we can do more for our customers, colleagues,
communities and shareholders
Credo We strive to always exceed customer expectations, do the right thing, think
long-term, work together
We are citizens helping citizens reach their potential
22Making consistent progress against our financial goals
Medium-term
Key Indicators targets
10.4% 11.7%
~13 - 15%
Adjusted/ 8.0% 8.4% 9.0% 9.6% 10.1%
Underlying 6.3% 6.2% 6.8% 6.7% 6.7% 6.6% 6.8% 6.6% 7.3%
4.3% 5.2% 5.2%
ROTCE(1)
Adjusted/
Underlying 68% 69% 70%
68% 68% 67% 68% 67% 66% 66% 66% 65%
efficiency 63% 62%
ratio(1)
62% 62% 59% 59% 60% Mid-50%’s
60%
13.9% 13.5% 13.4% 13.3% 12.9% ~10.0 – 10.25%
Common equity 12.4% 12.2% 11.8% 11.8% 11.7% 11.6% 11.5% 11.3% 11.2% 11.2% 11.2%
11.1% 11.2% 11.2%
tier 1 ratio(2)
EPS $0.68 $0.71 $0.78
Adjusted/Underlying $0.46 $0.52 $0.55 $0.61 $0.63
$0.37 $0.36 $0.39 $0.39 $0.40 $0.40 $0.42 $0.41
diluted EPS(1) $0.26 $0.30 $0.30
$0.57
3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18
(3)
Adjusted results(1) Reported results(1) Underlying results(1)
1) Please see important information on Key Performance Metrics and Non-GAAP Financial Measures at the beginning and end of this presentation for an explanation of our use of these metrics and non-GAAP financial
measures and their reconciliation to GAAP financial measures. Where there is a reference to “Underlying” results in a paragraph, all measures that follow these references are on the same basis, when applicable.
2) Common equity tier 1 ("CET1") capital under Basel III replaced tier 1 common capital under Basel I effective January 1, 2015.
3) Commencement of separation effort from RBS. 23Delivered attractive balance sheet and revenue growth in 1Q18
1Q18 vs. 1Q17
A strong platform well-positioned to drive value
Strong loan growth Revenue growth Higher NIM expansion
(Average total loan growth) (Total revenue growth) (Net interest margin change)
2.8% `
7.2%
vs Peers vs Peers vs Peers
5.6% 20 bps
212 bps 152 bps 19 bps 1 bps
98 bps
4.7%
0.7%
CFG Peer average CFG Peer average CFG Peer average
Robust NII growth Fee income performance Asset-sensitive balance sheet
(Net interest income growth) (Noninterest income performance) (+200 bps gradual increase over forward curve(2))
Peer data as of most recent 10-Q filing
8.6% vs Peers 8.3% vs Peers vs Peers
5.0%
181 bps 1037 bps 180 bps
6.9%
165 bps 292 bps
6.8% 3.2%
0.8%
-2.1%
CFG Peer average CFG Peer average CFG Peer average
CFG GAAP Peer average GAAP
Peer average Adjusted(1)
Source: CapIQ and Company filings. Peers include CMA, BBT, FITB, MTB, PNC, RF, STI and USB. As a result of KEY's 3Q16 acquisition of First Niagara, KEY's results have been excluded
from the Peer average and Peer median.
1) Where disclosed, peer results adjusted for unusual or special revenue, expense and acquisition items.
2) Reflects net interest income sensitivity to forward yield curve changes. Peer data based on public disclosures as of 1Q18 10-Q filing. Peer data utilizes a +200 basis point gradual
increase above the 12-month forward curve except PNC and STI, which disclose +100 basis point gradual increase and +200 basis point shock. PNC and STI estimated based on the
disclosed data. 24With continued focus on expense control and improving returns
1Q18 vs. 1Q17
Well-controlled expenses; Positive operating leverage Efficiency improvement
(YoY Positive operating leverage(1)) (Efficiency ratio(1) change)
investing for growth
(Noninterest expense change)
vs Peers vs Peers CFG Peer average vs Peers
3.4% 5.7%
194 bps 352 bps 237 bps
2.9%
57 bps 35 bps (103) bps 22 bps
1.5% (125) bps
2.1%
1.8%
CFG Peer average CFG Peer average (362) bps
PPNR Improving ROA as assets grow Return on equity
(Pre-provision Net Revenue) (Return on average total assets change) (Return on average tangible common equity(1) change)
21.8% vs Peers vs Peers vs Peers
40 bps 489 bps
1262 bps 23 bps 286 bps
164 bps 8 bps 102 bps
23 bps 31 bps 273 bps 375 bps
9.2%
7.5%
17 bps 203 bps
CFG Peer average CFG Peer average CFG Peer average
CFG GAAP Peer average GAAP
CFG Underlying(1) Peer average Adjusted(2)
Source: CapIQ and Company filings. Peers include CMA, BBT, FITB, MTB, PNC, RF, STI and USB. As a result of KEY's 3Q16 acquisition of First Niagara, KEY's results have been excluded
from the peer average and peer median.
1) Please see important information on Key Performance Metrics and Non-GAAP Financial Measures at the beginning and end of this presentation for an explanation of our use of
these metrics and non-GAAP financial measures and their reconciliation to GAAP financial measures, as applicable. Where disclosed, peer results adjusted for unusual or special
revenue, expense and acquisition items. 25Citizens Access – Consumers rapidly adopting digital/direct platforms
Direct Bank market growing in absolute
terms and as % of total deposits(1)
Direct Banks
$2.0T $3.8T CAGR
Direct Banks 3% Digital/Direct is the fastest growing channel in
19% 18%
the industry
─ Direct bank retail deposits grew at a ~18%
Traditional
Banks CAGR
CAGR from 2002 to 2017 compared with a
97% ~3% CAGR for traditional bank retail deposits
Traditional 3%
81%
Our objective is to provide an exceptional
digital experience
─ Accessible on a mobile device, tablet, or
2002 2017 computer at CitizensAccess.com
Digital banking customers have very favorable ─ Available through sites such as Google,
experiences(2) Bankrate and NerdWallet
87%
82%
72%
76% ─ Provides ability to further leverage robust
data analytics capabilities to improve the
56% 57%
efficiency of reaching the right customers,
at the right time, with the right offering, to
meet their needs
Direct Banks
Traditional Banks
Definitely Will Reuse Definitely Will Overall Satisfaction
Recommend
1) Source: SNL Financial, FDIC Flow of Funds. Includes Charles Schwab, Capital One, USAA, ALLY, Amex, Synchrony Bank, Discover, E*TRADE, Barclays, Marcus, CIT and Others.
2) Source: J.D. Power 2017 Direct Banking Satisfaction StudySM
26Citizens Access expands distribution to reach new customers
Citizens Access provides a winning combination of simplicity, security and attractive rates
Target customer
Profile: Opportunistic and digitally-savvy, affluent or mass-affluent consumers, large
balances ($75k-$100K)
Preferences: Opportunity to receive consistently better rates with little or no effort,
security of deposits, simplicity, fee avoidance
Behaviors: Seeks improved rates in return for a lower-cost service model on aggregator sites
or search engines, separates savings from transactions, often maintains separate primary
checking account at a traditional bank
Channel offering
Online & Mobile – primary sales and service channel
Paperless banking – all documents delivered electronically
Initially offering online savings accounts and certificates of deposit
Supported by professional call center
27Future oriented digital services and technology platforms
Building capabilities to better serve our customers
Modernize Strategic Data analytics Adaptive Security
Platforms
Minimize manual processes; Enabling a data environment Prepare for emerging
Partners & FinTechs to threats through trusted,
Deliver fast access to high
contribute new functionality simple and secure
quality data
capabilities
FinTech partnerships to
accelerate our path to Deliver a platform that can
market adapt to future threats
Open Architecture Cloud Agile
Continuing to open up Adoption of Cloud delivery Company-wide Agile delivery
architecture with Middleware model model; provide early,
& APIs predictable delivery, lower
‘Cloud First’ approach to
cost, better quality
Develop an App Store-like deliver agile, flexible, and
‘marketplace’ for secure low-cost solutions
collaboration
28Appendix / Key performance metrics,
Non-GAAP financial measures and reconciliations
29Key performance metrics, Non-GAAP financial measures and reconciliations
$s in millions, except share, per share and ratio data
30Key performance metrics, Non-GAAP financial measures and reconciliations
$s in millions, except share, per share and ratio data
31Key performance metrics, Non-GAAP financial measures and reconciliations
$s in millions, except share, per share and ratio data
32Key performance metrics, Non-GAAP financial measures and reconciliations
$s in millions, except share, per share and ratio data
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